The “same” client, a different interest rate
The colleague of a satisfied client contacted me with the request to arrange a mortgage for him. He chose a comparable flat with the same price, right next door.
After the first meeting, I made calculations in all the banks and got a different interest rate than in the case of his colleague who recommended me. Of course, I was asked why the colleague had a better rate by 0.5%. They have had the same job at the same company, for the same period of time, they work in the same position and earn more or less the same.
In determining the resulting interest rate, banks take into account a number of things:
- education
- marital status
- total liabilities
- credit register history
- number of dependent children
- ratio of the amount of the loan to the value of the property
- overall profile of the co-applicant
... and many other things that often cause differences between colleagues
Any of these things can make a difference in the interest rate in any direction. It can happen that the match is 100%, and nevertheless the colleague's rates are higher – it can be caused, for example, by asking for a loan a week after the end of the period of mortgage campaigns.
In practice, it can happen that there is a 100% match in everything, but for one client, the bank A with a rate of 4% is better, and for another, the bank B with a rate of 5% is better – because of the different expectations of the loan... For example, early repayment options in the bank A may not be as flexible as in the bank B, or there can be a requirement for a different loan fixation period. Other things also play their role in different interest rate – for example, the requirements for the speed of the loan arrangement, the ease with which the loan is provided in terms of documenting the income or the mortgage purpose, the requirement for progressive repayment, etc.
Kamil Bučo, 18.11.2012
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